4 hydropower companies apply to go public

May 2, 2017- Four hydropower companies have asked the Securities Board of Nepal (Sebon) for its go-ahead to make initial public offerings (IPO) worth Rs2.77 billion. The hopefuls, Rasuwagadhi Hydropower, Sanjen Jalavidhyut, Himalayan Power Partner and Nepal Hydro Developer, are likely to IPO by the end of this fiscal year in mid-July. Rasuwagadhi has planned to issue shares worth Rs1.64 billion, while Sanjen will float primary shares worth Rs876 million. These two companies applied to the regulator last week. Rasuwagadhi and Sanjen are subsidiaries of Chilime Hydropower. They will be issuing primary shares targeting employees of the promoter shareholding company, Employees Provident Fund (EPF) and employees of lending institutions.

Rasuwagadhi plans to produce 111 MW of electricity. Chilime and the Nepal Electricity Authority own 33 percent and 18 percent of Rasuwagadhi respectively. The company has appointed Siddhartha Capital, NIBL Capital Market, Global IME Capital and NCM Merchant Banking as issue managers. After the IPO, EPF employees will own 1 percent of the shares, contributors to EPF will have 19.50 percent and employees of promoter companies will have 3.5 percent of the shares in the company. Rasuwagadhi has set aside 10 percent of the shares for project-affected locals and 15 percent for the general public.

Similarly, Sanjen has planned to develop two new projects—Sanjen Hydroelectric Project with an installed capacity of 42.5 MW and Sanjen (Upper) Hydroelectric Project with a capacity of 14.8 MW. The power plants will be based in Rasuwa district. Sanjen has appointed Citizen Investment Trust as issue manager.

Likewise, Himalayan Power Partner and Nepal Hydro Developer applied to IPO last month. Himalayan Power that will be issuing 2,130,834 shares has assigned Global IME Capital as issue manager. The 27 MW project issued 1,065,417 shares worth Rs106.5 million to locals in the project affected areas in Lamjung district a few months ago.

Nepal Hydro Developer has planned to float 390,000 shares worth Rs39 million to the general public. The company has constructed the 3.52 MW Charanawati Hydropower Project in Dolakha district. It issued 260,000 shares to locals last December. Sebon Spokesperson Niraj Giri said the regulator had started reviewing the financial documents submitted by these companies. “If the companies fulfill the requirements, they can IPO by the end of this fiscal year,” he said. Recently, Sebon recently approved the IPOs of four companies—Radhi Bidyut, Mahuli Samudayik Laghubitta Bittiya Sanstha, Swadeshi Laghubitta Bittiya Sanstha and Chhyangdi Hydropower. They will be issuing 5,425,000 primary shares worth Rs542.50 million.